Strong USD buying after positive US durable goods report; European currencies suffer at hands of stronger USD; NZD cue to come from global sentiment and Asian markets

By Kymberly Martin

The USD has strengthened further against the majority of its peers. The NZD/USD trades at 0.6420 this morning.

There remain a multitude of forces at work on markets. Equity and commodity markets are providing ambiguous signals but overall our global risk appetite index remains at a fairly fragile 19%.

However, one apparently clear piece of positive news overnight was the July US durable goods orders report that was well above expectation.

It points to a recovering in US equipment investment after the negative impacts of the stronger USD and slump in the mining sector.

The USD was on the ascendancy from early last evening, later spurred on by US data releases. It suffered some volatility around the release of comments from US Fed’s Dudley. However, the USD index now sits close to intra-night highs, above 95.00.

European currencies suffered the greatest losses at the hands of the stronger USD.

The EUR/USD drifted down from above 1.1500 last evening to trade at 1.1350 currently.

Meanwhile, the NOK has been the worst performing major over the past 24-hours as it followed the WTI oil price lower in the early hours of this morning.

The AUD traded a fairly steady path sideways for much of yesterday before succumbing to USD strength in the early hours of this morning.

RBA Governor, Steven’s speech yesterday, failed to have any enduring impact on the currency. He emphasised that a key question for Australia was how to promote growth, over and above what can be achieved by monetary policy.

The AUD/USD now trades at 0.7100. Today there is the AU Q2 private capital expenditure report to look out for.

The NZD/USD also slumped in the early hours of this morning, following the release of US data.

From 0.6500 it now trades at 0.6420. In the absence of domestic releases today, the NZD will take its cue from broad global sentiment, which will likely be dictated by the direction of Asian equity markets this morning.

There are a broad handful of US data releases this evening, including the second reading of US Q2 GDP. The Jackson Hole symposium also kicks off, so keep an eye out for any headlines emanating from this event.


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Kymberly Martin is on the BNZ Research team. All its research is available here.

Daily exchange rates

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